Litigation Release No. 17338 / January 24, 2002

The Securities and Exchange Commission (SEC) announced that on January 15, 2002, the SEC filed, with the United States District Court for the Southern District of Florida, an Application for an Order to Show Cause why Defendant Paul Johnson (Johnson) should not be held in contempt for failure to comply with the Court's Orders. The application alleged that Johnson failed to provide a sworn accounting in accordance with a Court Order entered on December 12, 2001.

In its Complaint filed on December 12, 2001, the SEC alleged that Johnson's company, Link Express Delivery Solutions, Inc. (Link), which was based in Deerfield Beach and Ft. Lauderdale, Florida, and ceased operations in March 2000, conducted a series of five fraudulent private placement offerings between October 1997 and March 2000, raising more than $15.5 million from nearly 400 investors nationwide. The Complaint alleged that Johnson and others provided investors and potential investors with false and misleading offering documents and made material misrepresentations and omissions to investors concerning the use of investor funds, Link's projected revenues and anticipated returns, Johnson's business experience, and Johnson's control over Argus Securities, Inc. (Argus), a broker-dealer that sold certain Link securities. The Complaint also alleged that Johnson stole at least $2.3 million of investor funds, and spent another $3 million for non-Link purposes, which he had commingled with funds fraudulently raised from sales of his own unregistered Link stock.

On December 12, 2001, the Court entered an Order Granting Ex Parte Motion for Asset Freeze and Other Emergency Relief against Johnson and Relief Defendants J&J Management Consulting (J&J) and Johnson's mother, Caterina Johnson. On January 7, 2002, the Court entered an Order Granting Motion for Preliminary Injunction of Asset Freeze as to Johnson. On January 16, 2002, the Court entered an order extending the preliminary injunction to J&J and Caterina Johnson. The Court's Orders required Johnson to immediately provide the Court and the SEC with a sworn accounting of all monies received from Link. The Orders also require Johnson, J&J, and Caterina Johnson to repatriate any offshore monies and to provide the SEC and the Court with a written description of any repatriated funds.